Gold Star families aren't the only ones facing unexpectedly higher taxes under kiddie tax changes in the Tax Cuts and Jobs Act (TCJA). Some students who receive college scholarships or grants now face bigger tax bills, too, under the tax reform law that took full effect in 2018. Previously, scholarships or grants for nontuition expenses like room and board were taxed at the same marginal rate that the students' parents paid. That meant lower- and middle-income students generally paid lower tax rates on the educational financial assistance. But the TCJA now applies the higher trust and estates tax rate, which... Read more →
It's that terrible time of year when Mother Nature is on the rampage. In the last few days, at least 19 twisters have touched down in Tornado Alley. That dangerous weather pattern is expected to repeat and expand over the coming days. 3:57 PM - We know have TWIN tornadoes northwest of Crescent in far western Logan county, north of OKC. Both of these are currently on the ground. Storm is moving northeast at 35 mph toward Mulhall. #okwx @NEWS9 pic.twitter.com/fAkqaGemmZ — Matt Mahler (@themahler) May 20, 2019 In addition to spawning twisters that destroyed stretches of property, but luckily... Read more →
Memorial Day, our annual remembrance of the men and women who died while serving in the U.S. Armed Forces, is just a week away. Many members of Congress will be back home on May 27 taking part in Memorial Day ceremonies honoring military personnel for their ultimate sacrifice. But before then, Senators and Representatives are focusing how to correct a provision in the Tax Cuts and Jobs Act (TCJA) that has caused some military heroes' families to face higher tax bills. TCJA advocates, who hurried the Republican-written tax reform through Congress in late 2017, say the revisions to the so-called... Read more →
A big part of companies' federal tax responsibilities is paying employment taxes for their workers. These are the Social Security, Medicare and unemployment taxes on those employees' wages. However, when it comes to workers who are hired as contractors, it's the worker who's totally responsible for these taxes, in addition income tax withholding via estimated tax payments. That's why, when appropriate and fiscally feasible, many firms try to hire independent contractors. Sometimes, though, the line between employees and contractor is fine. It's facts and circumstances in each case when deciding how to classify a worker. And if the Internal Revenue... Read more →
"The Witch Trial," an 1848 painting by William Powell Frith via Wikimedia Commons Witch hunt. It's been one of Donald J. Trump's favorite phrases for more than two years. He's used the term 310 times, according to Factba.se, the website launched in January 2017 by Virginia husband and wife team Bill Frischling and Jennifer Canty as a way to track and share all of Trump's utterances, be they verbal, written or, most frequently, on social media. The last time Trump invoked witch hunt to decry investigations linked to him was in a Tweet the afternoon of May 12: ....employment numbers... Read more →
If you filed your taxes before May 16 and your earnings included investment income, you might want to take another look at your return. The Internal Revenue Service announced on its website yesterday, May 16, that the 2018 Schedule D tax worksheet in that form's instructions contained an error. "The tax calculation did not work correctly with the new TCJA [Tax Cuts and Jobs Act] regular tax rates and brackets for certain Schedule D filers who had 28% rate gain (taxed at a maximum rate of 28%) reported on line 18 of Schedule D or unrecaptured section 1250 gain (taxed... Read more →
Photo by Fisherga via Flickr CC The Preakness, the second leg of horse racing's Triple Crown, is Saturday, May 18. As a former Maryland resident, the 144th running of the race the Black Eyed Susans will be somewhat bittersweet. It could be the last time the legendary race will be held at Baltimore's Pimlico Race Course. It also will not lead to a Triple Crown winner. Preakness problems: Country House, the eventual Kentucky Derby winner after Maximum Security, who crossed the Churchill Downs line first, was disqualified, will not run in this year's Preakness. By opting out of the Baltimore... Read more →
The Internal Revenue Service has formed a working group to look into allegations that some of its Free File members really didn't (don't?) want taxpayers to file for free. State and city officials have launched official investigations into or taken legal steps in connection with allegations that some tax software companies redirected online searches away from their free options on at the IRS website. Now what is being hailed as the first nationwide class-action lawsuit in the matter has been filed against Intuit, the maker of TurboTax. Tax software giant is legal target: It's no surprise that the tax software... Read more →
This is a big week for Lone Star State businesses. The state's franchise tax is due May 15. For my fellow Texas business owners, that's tomorrow. Unless you're a Wolters Kluwer CCH software client. Then you have until May 22. See my prior post for more on the recent CCH malware problems and the filing accommodations being made by the Internal Revenue Service and Texas tax officials. I don't want to bore all y'all that don't live here, but since other states have business levies similar to ours, here's a quick, general take on Texas' tax system. The privilege of... Read more →
At least one state, Texas, joins the Internal Revenue Service in making filing accommodations for those affected by software company's malware troubles. Watch the full classic Roseanne Roseannadana skit at NBC's Saturday Night Live video page. As the wonderful Gilda Radner character Roseanne Roseannadana used to say, "It's always something." That's particularly true in the tax world. Just when we thought we had made it relatively unscathed through the 2019 tax season, which already was crazy since it was the first one in which most of the Tax Cuts and Jobs Act (TCJA) changes took real life effect for taxpayers,... Read more →
Mom's obviously enjoying the Mother's Day gifts from her children. (Photo by Loren Kerns via Flickr CC) Anna Jarvis organized the first Mother's Day observances in Grafton, West Virginia, and Philadelphia, Pennsylvania, on May 10, 1908. As the annual celebration became popular around the country, Jarvis became the driving force behind a special day to honor moms and asked members of Congress to make it official nationwide. She succeeded in 1914. That year, Congress designated the second Sunday in May as the official celebration of Mother's Day. President Woodrow Wilson's proclamation declaring May 9, 1914, the first national Mother's Day.... Read more →
Mothers are the personification of "it's the thought that counts" when it comes to presents. Any mom would enjoy Mother's Day breakfast in bed on these plates made by her youngsters. (Photo courtesy Mrs. Goff's Pre-K Tales) Bought your mom a Mother's Day gift yet? If so, or even if you're still decided what to give her tomorrow, chances are you'll go the traditional route. "This year, besides the traditional cards, flowers, and clothing, spa services have come into their own as they are seen as more personalized and customizable gifts to pamper Mom," noted Robert Passikoff, president of Brand... Read more →
Photo by vxla via Flickr CC If gratuities are part of your work, then the 10th of the month is an important tax date for you. It's the day — or the next businesses day if the 10th falls on a weekend or holiday — that you must report your tip amount for the previous month when it totals $20 or more. The Internal Revenue Service requires these reports because the tax code considers all types of tips as discretionary, fully taxable income. Wisconsin workers, however, may soon get a break on the state tax level when it comes to... Read more →
Uh oh. How did that 1099-MISC end up that desk drawer instead of with all your other tax documents you used to file your annual tax return? That mystery might never be solved, but an X filing can help you get the truth about your taxes to the Internal Revenue Service. I'm talking about IRS Form 1040X. It's the document you use to correct filing mistakes. It's known as the amended tax return form and it's really not that puzzling. Basically, Form 1040X lets you tell the IRS what you originally reported, what your revised numbers are and why you... Read more →
Free File is finally getting a lot of attention. Unfortunately for companies involved in the Internal Revenue Service/tax software partnership, it's not the kind of attention they want. The IRS now is following state officials in California and New York in looking into whether potential Free File users were intentionally directed away from the program. Free but not that popular: Free File, as the name indicates, was designed to allow most taxpayers access to no-cost online tax return completion and electronic filing. The 2019 filing season is its 17th. It's still available to taxpayers through the Oct. 15 extended filing... Read more →
Around two dozen tax breaks are now in a legislative zombie state, much like these creatures in George Romero's classic zombie film "Night of the Living Dead." The tax versions are waiting for federal lawmakers to bring them back to life or finally and completely put an end to them. (Photo via Wikimedia Commons) A dozen groups spanning the political spectrum are urging Congress to let zombie tax extenders remain dead. Are you still waiting on expired tax provisions to be resurrected? If a motley crew of public policy, tax and advocacy groups get its way, you'll be waiting forever.... Read more →
New parents Harry and Meghan don't have to worry about the expense of their new bundle of joy. But for us non-royals, raising children is costly. We former colonists here across the pond can get some help covering those costs thanks to several U.S. tax breaks. An obviously elated Prince Harry announces the birth of his and wife Meghan's son. (Screen shot from the Sussex Royal Instagram) It's a boy! Watchers of the Royal Family in the United Kingdom, here across the pond and yes, worldwide, are celebrating today's announcement that the Duke and Duchess of Sussex are now parents... Read more →